AN ACT ESTABLISHING A PROVIDENT PERSONAL SAVINGS PLAN

Case Overview and Summary

Summary of the Personal Equity and Retirement Account (PERA) Act of 2008

Establishment and Contributions
- A Contributor can create and maintain a maximum of 5 PERA at any time, with only 1 Administrator for all PERA. (Section 4)
- Maximum annual contribution is ₱100,000 or equivalent foreign currency. If married, each spouse can contribute ₱100,000. Overseas Filipinos can contribute double the amount. (Section 5)
- Employers can contribute to employee's PERA up to the allowable amount for the employee. (Section 6)

Tax Treatment
- Contributor gets 5% tax credit on total PERA contribution, but no refund of the credit. (Section 8)
- All income from PERA investments is tax-exempt. (Section 9)
- All qualified distributions are tax-exempt. (Section 10)

Distributions and Withdrawals
- Distributions allowed at age 55, after 5 years of contributions, as lump sum or pension. (Section 12)
- Complete distribution upon Contributor's death, regardless of age. (Section 12)
- Early withdrawals subject to penalty determined by Secretary of Finance, at least equal to tax incentives enjoyed. Exceptions for hospitalization over 30 days and permanent disability. (Section 13)

Other Provisions
- PERA assets are separate from Administrator/Custodian assets and cannot be assigned, alienated, or subject to insolvency/estate taxes. (Sections 7, 14)
- Rules and regulations to be established by DOF, BIR, and regulatory authorities on various aspects of PERA. (Section 15)
- Penalties for violations by Administrators, Custodians, or Investment Managers. (Sections 17, 18)